A shift towards household lending during the Fintech era: the role of financial literacy and credit information sharing

Abstract

PurposeThis study aims to investigate the determinants of a shift in lending towards household sectors during the growth of fintech credit using a sample of 41 countries between 2015 and 2018.Design/methodology/approachThis study uses a fixed-effects model by adding indicators for geographic areas and year dummy variables to achieve this objective.FindingsThe findings show that the household credit to firm credit ratio is positively associated with credit information sharing and financial literacy, emphasising the importance of credit information sharing mechanism and financial literacy to household credit growth. More interestingly, the findings show that fintech credit development plays a more critical role in the evolution of firm credit than household credit. Nonetheless, fintech credit development may complement the growth of conventional lending. The results still hold when using several robustness checks.Originality/valueThis is the first attempt to examine the roles of credit information sharing, financial literacy and fintech credit development in a shift in lending activities towards households.

What role do FinTech companies play in supply chain finance? A signaling intermediary perspective

“…In addition to enhancing liquidity, another benefit provided by FinTech companies is promoting a more open and distributed supply chain information network. By operating on a platform, FinTech Company promotes information sharing among all participants (Le, 2022) and allows key actors to join the network on an equal footing to access resources. The findings show that because of the intermediary role of FinTech companies, the influence and be-influenced indexes of each participant are relatively balanced, which indicates that the enterprise is relatively stable in the network and less likely to lead to a situation where it is controlled by others because of insufficient information, or that it controls others using information advantage.…”

FinTech solutions for sustainable agricultural value chains: A perspective from smallholder farmers

“…While smallholder farmers are familiar with agricultural credit and subsidies, enhancing financial literacy among the general public is essential. Insufficient financial knowledge among borrowers discourages them from utilizing formal channels for financing (Le, 2022).…”

Digital Credit and Its Determinants: A Global Perspective

“…The first strand is to investigate the effect of digital credit on the conventional financial market, especially the banking sector. Several studies using firm-level and aggregated data have attempted to examine the impacts of fintech credit (e.g., peer-to-peer lending) on commercial banks' lending (Buchak et al 2018;Tang 2019;De Roure et al 2021;Sheng 2021;Hodula 2021), bank efficiency or profitability (Le et al 2021;Nguyen et al 2021), household and firm credit (Le 2022b), economic growth (Song and Appiah-Otoo 2022), and income inequality (Hodula 2023).…”

“…Mixed findings have also been found when observing financial development components. Nonetheless, Le (2022b) emphasized that fintech credit tends to expand more in developing countries where the level of financial development is lowered. Furthermore, it is acknowledged that information technology infrastructure is a critical prerequisite for expanding digital credit.…”

“…Several studies have concentrated on different dimensions of digital credit using micro-data levels (De Roure et al 2016Freedman and Jin 2017;Jagtiani and Lemieux 2019;Berg et al 2019;Cheng and Qu 2020;Sheng 2021). However, several studies using cross-country exist (Claessens et al 2018;Cornelli et al 2023;Nguyen et al 2021;Le 2022b;Le et al 2021). We continue exploring the determinants of digital credit using aggregated data levels.…”